Richard R Bourgeois
Small Business Owner, Individual, Tax Payer, Citizen
Tax Reform Proposal Comments
Richard R Bourgeois
Gainesville, GA
rick@vsoftsys.com
April 28, 2005
Richard R Bourgeois
Small Business Owner, Individual, Tax Payer, Citizen
Tax Reform Proposal Comments
I have followed US Tax policy most of my life. As a child in the 50s and 60s my Grandfather and Mother
were both Public Accountants and Tax Consultants. Today, I still have a brother that carries on that
tradition. Most if not all of the personal and business financial decisions I have made throughout my life
have taken tax policy into consideration. I don’t expect this will change regardless of any changes made
to taxation, based on recommendations of the Tax Panel. I won’t spend time going over the problems
with the current complex Federal Income Tax system because I believe they are well known and have
already be presented to the Tax Reform Panel. I believe I know most of the tax reform proposals that will
be made to the panel because I have seen them all before.
1. Simplify the current income tax system.
2. Flat tax
3. National Retail Sales Tax replacing the Income Tax.
4. National Retail Sales Tax replacing all forms of Income Tax. (FairTax)
I learned of the FairTax HR25, S25 earlier than most because my U.S. House Representative John Linder
was one of the first to recognize the benefits of this proposal and co-authored the original HR 25 bill. I
have read all of the presentations made to the Tax Panel on your website and from them understand the
FairTax would probably be one of the most difficult to implement. However, the FairTax addresses many
more problems faced by the United States, in a global economy, than just the complexity of the current
Income Tax system.
The FairTax would:
1. Untax capital for expansion
2. Untax exports to make US goods more competitive in the global economy
3. Solve the Social Security funding problem by spreading funding across the entire economy
4. Uncouple Social Security from wages allowing for a standard benefit not tied to income
5. Remove the regressive Social Security and Medicare tax from low income workers
Richard R Bourgeois
Small Business Owner, Individual, Tax Payer, Citizen
6. Reduce the cost of employees and promote hiring
7. Bring manufacturing and service jobs back to the U.S.
8. Save the economy billions of dollars, thousands of hours of unproductive work in tax compliance
and millions of trees used to create 60,000 pages of tax code, and millions of pages of IRS forms
and publications.
9. The FairTax prebate would insure no one with a Social Security Number pays federal taxes on
their income or spending up to the poverty level and only about 12% at twice the poverty level.
10. Reduce the cost of higher education because tuition would be treated as an investment and not
taxed.
11. Untax and increase saving and make it easier for low-income families to save the down payment
for a home.
12. Tax the underground economy
The major problems in implementing the FairTax would be:
1. Could the Congress give up trying to micro manage the economy and control social policy through
tax code? Would the lobbyist let them?
2. Coordinating implementation and taxation with the state and local taxing authorities
3. Repealing the 16th amendment to the constitution
If the Federal FairTax were adopted and state and local taxing authorities followed the guidelines of the
FairTax, with a prebate up to the poverty level, we could truly untax low-income households. From the
presentations to the Tax Panel on state and local taxing, many states collect one third of their tax revenue
from an Income taxes and one third from Sales and Use taxes. Those states with income taxes would
probably shift those taxes to Sales and Use taxes. In those states with high income and sales taxes the
combination of federal and state/local sales taxes would seem high, however the total taxation of state
residents would be no higher than it is today and if the states adopted a prebate the tax would not apply to
households below the poverty level.
Richard R Bourgeois
Small Business Owner, Individual, Tax Payer, Citizen
I don’t expect at my age any changes to the taxing structure will have much effect on me however if this
country does not take some drastic action to make it more competitive in the world economy and attract
capital and jobs, in a few decades it will be bankrupt. No Country, Company or Individual can
continually spend more than it takes in and run trade deficits with other countries and expect to not go
bankrupt. As a part of tax reform I would dearly love to see the Fairtax enacted, the 16th amendment
repealed and a federal balanced budget amendment added to the constitution. I have little hope that the
congress will ever balance the federal budget without being forced to by an amendment to the
constitution.